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3 Million Compensation for Using Physical Plugins to Grab Orders: Supreme Court Releases 9 Typical Cases

The Supreme People's Court recently published nine typical cases of unfair competition, shedding light on the growing challenges in the digital economy. Among them, a case involving physical plugins for grabbing orders on delivery platforms stands out, with the court ordering a compensation of 3 million yuan. This move underscores the judiciary's commitment to maintaining fair competition in the platform economy.

The Case of the 'Tap-and-Swipe Device'

In this case, three companies operating a food delivery platform and a crowdsourcing platform faced numerous complaints from riders about the use of cheating devices. An electronics company was found to be selling a product called the 'Tap-and-Swipe Device' on e-commerce platforms. The company even provided tutorials on how to connect the device to the platform's app, enabling riders to automatically and rapidly grab orders, far outpacing manual efforts. The product generated sales amounting to millions of yuan.

The Huangpu District People's Court in Guangzhou ruled that the device circumvented the platform's operational rules through technical means, interfering with the normal functioning of the scheduling algorithm and causing the order allocation mechanism to fail. This not only hindered the platform's business operations but also disrupted the fair competition among riders. Riders using the device could snatch high-quality orders, reducing opportunities for compliant riders. Moreover, such illegal order grabbing often led to order cancellations and delivery delays, harming consumers and merchants alike.

The court ordered the electronics company to pay 3 million yuan in compensation, and the judgment has taken effect.

Broader Implications for AI and Live Streaming E-commerce

The nine cases cover a wide range of legal issues, including imitation confusion, infringement of trade secrets, commercial defamation, false advertising, and online unfair competition. Notably, Case Three clarified that maliciously 'reconstructing code' to systematically replace core functions of others' network products for profit constitutes unfair competition. Case Six addressed the use of AI technology to mass-produce and publish fabricated reviews targeting competitors' products, which was deemed unfair competition. In Case Seven, the court found that live-stream e-commerce operators who used technical means to alter recommended products in competitors' live-stream shopping videos, misleading consumers, were guilty of false advertising. Case Eight and Nine dealt with commercial defamation through maliciously edited review videos and comparative advertisements lacking professional support.

These cases reflect the judiciary's proactive approach to addressing new forms of unfair competition arising from technological advancements. The Supreme People's Court has stated that it will continue to strengthen trial work against unfair competition, improve adjudication rules, and provide judicial guarantees for building a unified national market.

Key Points

  • Physical plugins for order grabbing are considered unfair competition, with a 3 million yuan compensation ordered.
  • AI-generated fake reviews and live streaming e-commerce tampering are also targeted.
  • The cases highlight the need for fair competition in the digital economy.
  • The Supreme People's Court is committed to strengthening anti-unfair competition trials.